Materials Distributed with Agenda Packet

Historical Financial
Analysis

Summary of Priority Unfunded Items - Updated

Summary of Funds To Date -
Updated

APPROVAL OF AGENDA

Don Farish convened the meeting at 4:10 PM by asking for a motion to approve
the Agenda. Dennis Harris moved to approve the Agenda. A second was obtained
from Debbie Gallagher. The Agenda was approved unanimously.

APPROVAL OF MINUTES of April 10, 1997

Farish asked for a motion to approve the minutes of the April 10, 1997 meeting
of the PBAC. Harris moved to approve the Minutes. A second was obtained from
Jose Andrade The minutes of the meetings were approved unanimously.

GENERAL FUND - ACADEMIC AFFAIRS - (continued)

Farish continued with the Speaker's List that remained from the April 10,
1997 meeting. He recognized Bill Barnier who asked what would happen to new
funds from the CSU for enrollment growth projected for 1997-1998. Farish responded
that the Cabinet had decided that these resources would be allocated to Academic
Affairs in 97-98 and that a formula for allocation of enrollment growth funds
beyond 97-98 would be developed.

Andy Merrifield asked how much money was collected from students who paid
the Enrollment Deposit Fee and then decided not to attend SSU. Silvia Barajas
indicated that about $3,000 - $4,000 resulted annually.

HISTORICAL FINANCIAL ANALYSIS

Schlereth introduced the Historical Financial Analysis, which was developed
at the request of the PBAC and is a comparison the "Black Book" budgets
for 1992/93 and 1996/97, for both General Fund and All Funds. The Historical
Analysis document was distributed to the Members and added to the PBAC Record
of proceedings (Record) He noted that, although the authors (p. 4) are responsible
for the analysis, the presentation of that analysis are his own.

Following presentation of the General Fund Only budget for Academic Affairs
(p. 8), Farish noted that the $306,000 in Revenue Above the Base has not yet
been received and is being "bankrolled for the coming year." As a
result, it
"can be put against claims." In response to a question by Adler,
Farish noted that this is separate from money received for increased enrollment.
Farish noted that this revenue would be included in the 1997/98 Base Budget,
and thus would be available at the beginning of the year.

There was substantial discussion of the CSU-Mandated Expenses in University Wide
(p. 12). Barnard asked how the CSU mandates programs such as Summer Bridge.
In response, Schlereth explained that CSU mandates programs and provides funds.
If the campus spends more than that provided, it must make up the difference;
if it spends less, it retains the savings. Farish pointed out that there is
limited latitude, since there still is the requirement that the mandated task
be performed. Schlereth noted that decentralization of programs is a fixed
item - even though costs may rise, CSU does not increase the funds. Both Schlereth
and Merrifield noted the tendency of central budgetary authorities such as
the Federal & State governments as well as the CSU to pass through mandates
to other authorities (local governments and CSU campuses) without providing
either full funding or provision for increased costs.

Garlin asked the relationship between Summer Bridge and ILE. Farish noted
that these were separate programs with separate funding.

To explain the funding, Schlereth noted that in the case of Risk Management,
the CSU submitted a Plan for Financial Adjustment (essentially a bill) which
SSU then paid from its General Fund Budget. He also noted that the Governor's
four-year compact with Higher Education came with performance expectations,
and that SSU was required to provide an audit report of the use of funds like
those for Deferred Maintenance. Farish noted that the Teaching and Learning
Productivity funds, $15,000 to each campus, also required an audit report.

In response to questions regarding the flexibility of the campus with regard
to New SSU Programs in University Wide (p. 13), it was noted that both the
Employee Assistance Program and Hazardous Waste Disposal involve contractual
relationships with vendors. The School Development Effort funds are used both
to fund personnel and for OEE. Garlin noted that the OEE portion could be available
for deficit reduction. $50,000 of the University Scholars Program is used for
$1,000 individual grants to entering Freshmen with 4.0 and higher GPAs. They
continue to receive these grants as long as they maintain a 4.0. The remaining
$50,000 goes to the President's Discretionary Fund. The Thermal Energy Storage
(TES) Payment is $60,000 per year for ten years. Once the Information Center
comes on line, the accompanying allocation for utilities will provide a source
of funds. TES should reduce actual costs, creating savings, unless the Chancellor's
Office adjusts our budget for the preexisting TES. Schlereth noted that after
ten years, TES should generate new money. Wilson cautioned that it may minimize
increased costs. Schlereth noted that the Historical Analysis revealed the
campus' success in lowering the overall costs while experiencing greater usage
through energy management. It was explained that the Faculty Workstation Program
is a three-year, rolling lease agreement with Apple Corporation. If SSU wished
to terminate the lease, the earliest it could do so would be the 1999/2000
budget year.

There was substantial discussion of the Explanation of the Structural Deficit
(p. 14). Schlereth noted that the appearance of a structural deficit is not
unusual, since the Original Budget was developed in March, while the Governor,
Legislature, and CSU Chancellor's Office were still developing the final budget.
Garlin asked whether COLAs were the same as what the CFA referred to as general
salary increases. Schlereth responded affirmatively. In response to Garlin's
question about the Benefits, Schlereth explained that the Budget was a forecast,
a planning document. Actual costs of benefits differed for employees depending
upon family status. The Budget was also developed prior to notification by
PERS of any increases in employer contributions to benefits. Sometimes unions
will bargain an increase in benefits (Wilson cited the recent Unit 8 contract).
Schlereth noted that the bargaining and budgeting processes were not in synchronization.
Garlin asked what funded the President's housing and car allowances. Schlereth
responded that these were included in Executive Office OEE.

Barnard asked for clarification of the $422,310 noted on page 13 (New SSU
Programs) and that in the explanation. Schlereth explained the $422,310 was
a result of the failure to cut other based budgeted expenses in response to
projected budgeted revenue. Link asked for an explanation of Benefits under
the Original and Revised budgets. Schlereth said the Revised primarily reflected
changes in Part-Time Faculty. There is no way of knowing in March whether such
faculty will be hired by multiple departments/schools and qualify for benefits.
He also noted that where there are savings in actual Benefits expenditures,
the surplus will be moved to cover deficits in other University-Wide categories.
Farish noted that ideally, we will have savings in University-Wide benefits;
however, the campus has reduced its budget projections based upon actual practice,
thereby reducing the ability to "capture benefits as savings." In
response to Garlin's question about the differences between the Budget document
and a year-end expenditures report, Schlereth noted that in the past SSU had
not prepared a formal year-end report for distribution. The campus will prepare
one at the end of the 1996/97 fiscal year.

After a ten-minute recess, PBAC turned to the Historical Financial Analysis
of All Funds (p.16). In response to Terrill's question, Link said there had
been Student Health Center Fee increases in 1992/93, 1993/94, and 1994/95.
Link noted that the negative variance of $32,001 represented the loss of one
management position. It response to Garlin's question, Link noted that the
Health Center has always been part of Student Affairs.

Regarding the IRA Variance Available to Academic Affairs (p.
23), Crabbe noted that IRA funds are a pass-through, with the IRA Board recommending
the budgets and Academic Affairs receiving the money allocated for the funded
programs. She also noted that "part of the deal" when the IRA fee was
last raised was that the increased revenue would not be used to offset a reduction
in General Fund money. It response to Garlin's question, Barnard explained that
IRA programs must be instructionally related; Lacrosse is a "club sport" related
to instruction in the Kinesiology department; and funds were utilized for equipment
actually used in classes. Terrill questioned whether the Library should be funded
through IRA.

Regarding the Total Academic Foundation Variance Available in Academic
Affairs (p. 24), Barajas reminded PBAC that the OEE Augmentation to Schools
was shown in last week's presentation of Academic Affairs OEE. Farish explained
that the division of these funds between the Provost and the schools was
the result of
"sometimes ancient agreements between the Director, the Dean, and the
Provost."
He had already had discussions with the California Institute for Human Services
about renegotiating the agreement and expected to be doing the same with the
Anthropological Studies Center shortly.

Three additional items were distributed. Barajas distributed a sheet entitled
"Revenue Growth - $503,290", which identified exisitng (Alumni Director,
$88,087), IT Augmentation, $100,000; Academic Clericals, $90,000; Budget Officer,
$80,010; and Part-Time Faculty Augmentation, $260,955) as well as planned (Savings
to be Allocated, $306,000) expenses, totalling $925,052, and creating a negative
nariance of -$421,762. In addition, Farish distributed an Outcomes Analysis
for Academic Affairs [which follows page 47 of the 4/17/97 revision of
the Historical Analysis], and Schlereth provided a written explanation
of the
"Utilization of New Funds" for A&F's All Funds Budget.

Following a review of the remainder of the All Funds analysis, PBAC agreed
to
"Move the Agenda" to the next item.

SUMMARY OF PRIORITY UNFUNDED ITEMS

Schlereth referenced the Agenda Packet and reviewed the Summary of Unfunded
Items that had been updated by the University Cabinet. He clarified the reasons
for changes from the original document reviewed by the PBAC at a previous meeting.

The Committee then recessed for a Dinner break.

DEVELOPMENT OF BUDGET RECOMMENDATION

Following dinner, Melinda Barnard suggested the Members brainstorm ideas
that could then be evaluated as a possible methods to finance the Priority
Unfunded Items. The following list of ideas was generated by the Members: (Note:
Several of the items listed were generated by Members after the close of the
Meeting and transmitted to the PBAC staff).

Utilize Housing Funds to offset the deficit, including those in the Housing
Deferred Maintenance Program. Transfer EMT to Housing, saving $100-400K.
Conduct outcomes assessment of EMT, to determine cost/benefit.

Move General Fund degree programs to CERF. Capture savings from transfer
of Faculty from General Fund to CERF.

Move Summer Session and Inter-Session
to the General Fund in order to meet enrollment targets while reducing Regular
Session expenditures (e.g., costs of registration.

Evaluate costs/benefits
of Library and Information Technology.

Evaluate cost/benefit of Customer Service
Center.

Following the brainstorm session, considerable discussion ensued with respect
to next steps. Members decided, by consensus, to ask the PBAC Staff to analyze
the ideas and to prepare a presentation regarding the various alternatives
for the April 23, 1997 meeting.

Good of the Order

Adjounment

At 9:55 PM Farish adjourned the meeting and reminded Members of the next meeting
scheduled for April 23, 1997 from 4-10 PM.